Overview

The Western Australian Local Government Grants Commission (the Commission) is a statutory body established by State legislation, the Local Government Grants Act 1978.

Its principle function is the making of recommendations to the State Minister for Local Government on the allocations of "General Purpose Grants" amongst 138 local governments in WA. These General Purpose Grants are the State's entitlement for financial assistance from the Commonwealth Government, paid in equal quarterly instalments for a financial year, under the Australian law, Local Government (Financial Assistance) Act 1995.

The distribution of Commonwealth Government Financial Assistance Grants is for local government purposes, to achieve equitable levels of services, by reasonable effort.

Current membership of the Commission

The current membership of the Commission is:

Role

Name

Position

Chairman

Linton Reynolds

Commissioner for the City of Canning

Deputy Chairman

Brad Jolly

Executive Director of Sector Regulation and Support from the Department of Local Government and Communities

Member

Paul Omodei

Councillor for the Shire of Manjimup

Member

Ian Carpenter

Mayor for the City of Greater Geraldton

Member

Carol Adams

Mayor for the City of Kwinana

The Role of the Western Australian Local Government Grants Commission

The Western Australian Local Government Grants Commission consists of, a chairperson, a deputy chairperson and three elected members from local government. The Commission is supported by staff employed by the Department of Local Government and Communities.

The Western Australian share of Commonwealth funding for 2014-15 is $280,989,640 being 12.28% of the national allocation of $2.288 billion. This funding is untied, i.e. there are no conditions on how these funds should be spent. The allocation has increased from $274 million in 2013/14. This amount is divided into two parts, a general purpose component and a local roads component.

Funding provided to local governments

The funding provided to local governments is allocated on the basis of horizontal equalisation, to ensure that each local government in the State is able to function at a standard not lower than the average standard of other local governments. All local governments are entitled to receive at least the minimum grant. That minimum grant cannot be less than 30% of what the local government would receive if all grants were allocated on a per capita basis.

Balanced budget

The Balanced Budget approach has been used to calculate General Purpose Grants since 1994. The Commission calculates the equalisation requirement of each local government by assessing the revenue raising capacity and expenditure need of each local government. Five categories (called standards) have been used to calculate revenue raising ability and six categories have been used to establish expenditure need.

The equalisation requirement is the difference between the assessed expenditure need and the assessed revenue raising capacity of each local government. A range of disability factors have been developed by the Commission, (e.g. location, population dispersion and socio economic disadvantage), and are included in the calculation of the standards to recognise the additional costs a local government faces due to its physical or demographic characteristics.

Asset preservation model

In determining the local road funding for local governments, the Commission has established the Asset Preservation Model. This model is used to assess the cost of maintaining a local government’s road network and takes into account annual and recurrent maintenance costs and the costs of reconstruction at the end of a road’s useful life.

Public hearings

The Grants Commission is required to keep up with the changing face of local government to ensure that its methods reflect the operations of the industry. As part of this process, the Commission visits approximately 30 local governments each year to hold Public Hearings. This visiting programme provides a valuable opportunity for local governments to inform the Commission of the issues they are facing. The Commission also receives submissions from local governments each year seeking modifications to the grant determination process so that it will reflect their needs more effectively.